In a unanimous decision issued June 4, 2026 in Sripetch v. SEC,¹  the U.S. Supreme Court held that the U.S. Securities and Exchange Commission (SEC) may obtain disgorgement without showing that any victim suffered pecuniary harm as a result of a defendant’s securities law violations.

The Court grounded its analysis in traditional principles of equity. Writing for the Court, Justice Gorsuch explained that, under those principles, a person seeking disgorgement of unlawful gains does not need to show that victims lost money.²  To the contrary, in an action at equity, a victim that has “suffered an interference with protected interests” may be entitled “to restitution of the defendant’s wrongful gain from that interference even when he has suffered no measurable loss whatsoever.”³

The Court explained that its decision in Liu v. SEC⁴  does not compel a different outcome. Although Liu held that disgorgement is an equitable remedy that “must be awarded for victims,” the Court explained that proof of pecuniary loss is not required to meet this requirement.⁵

Nor was the Court persuaded by Sripetch’s argument that permitting the SEC to obtain disgorgement without proof of pecuniary harm contradicts Liu’s instruction that disgorgement is designed to “restore the status quo.”⁶  In some cases, the Court explained, a “defendant can unjustly enrich himself even without leaving a plaintiff worse off financially.”⁷  When that happens, “a court must choose between two status quos: It can either restore the defendant to his prior position by stripping him of his unjust gains, or it can allow the defendant to benefit from his misconduct because the plaintiff’s financial position has not changed.”⁸ The Court observed that “equity traditionally prefers the first outcome, not the second.”⁹

The unanimous decision aligns with skepticism the Court expressed at oral argument toward Sripetch’s attacks on the SEC’s right to disgorgement. Still, open questions remain, including the impact of Congress’s 2021 amendments to the Securities Exchange Act, following the Liu decision, to include disgorgement as a remedy that is expressly available to the SEC. The Court reserved judgment, for example, on whether the SEC can rely on the 2021 amendments to pursue what amounts to a penalty payable for the benefit of the U.S. Treasury or that otherwise offends traditional principles of equity as discussed in Liu.¹⁰  In other words, while the Court assumed in Sripetch that disgorgement is permissible if within equitable limitations, it left open whether—and when—disgorgement that goes beyond equitable principles can withstand legal challenge.

In a concurring opinion, Justice Thomas raised a different, but related issue, expressing his view that the 2021 amendments provide the SEC with a new remedy at law (not an equitable remedy) that entitles defendants to a jury trial, and suggesting that the Court should address, in a future case, “whether the SEC should be able to continue seeking disgorgement in equity at all.”¹¹

With this and other questions outstanding, the bottom line is clear: a key tool in the SEC’s enforcement arsenal remains intact, at least for the time being.  

Read Akin’s earlier analysis of Sripetch v. SEC here.

1 Sripetch v. SEC, No. 25-466.

2 Sripetch v. SEC, Slip Op. 9.

3 Id. (quoting Restatement (Third) of Restitution and Unjust Enrichment, § 3, Reporter’s Note a; id., § 1, Comment a) (emphasis added).

4 Liu v. SEC, 591 U.S. 71 (2020).

5 Sripetch v. SEC, Slip Op. 11 (quoting Liu, 591 U.S. at 79).

6 Id. (quoting Liu, 591 U.S. at 80).

7 Id.

8 Id. at 11-12.

9 Id. at 12.

10 Id.

11 Sripetch v. SEC, Slip Op. 8 (Thomas, J., concurring).